PM sets up A-team to get cracking on power reforms

The promoters of private power companies, including Ratan Tata and Anil Ambani, met Prime Minister Manmohan Singh on Wednesday and sought solutions to problems like acute fuel shortage, coal prices, delays in green clearances and funding.

Singh assured them a road map would be prepared to resolve the issues in a time-bound manner.

It was decided a Committee of Secretaries headed by Principal Secretary to the Prime Minister, Pulok Chatterji, would be set up to look into the power sector's problems.

The committee will chalk out 30-day, 60-day and 90-day plans.

The power sector leaders will meet the PM after 90 days to review the progress.

The 18-member industry delegation included Tata Power Chairman Ratan Tata, Lanco Infratech Chairman L Madhusudan Rao, Reliance Power Chairman Anil Ambani, Tata Power Deputy Chairman Cyrus Mistry, and Congress MP and Jindal Power Chairman Naveen Jindal.

The delegation, representing about 25 per cent of India's generation capacity of 186,655 Mw, started the day with a meeting at the Planning Commission and ended it at Finance Minister Pranab Mukherjee's office.

In between, there was a series of meetings with coal minister Sriprakash Jaiswal, petroleum minister Jaipal Reddy and environment minister Jayanthi Natarajan.

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Those present at the PM's meeting included power minister Sushilkumar Shinde, Planning Commission Deputy Chairman Montek Singh Ahluwalia, Jaiswal and Natarajan.

Shinde later told the media

the PM had assured the industry all possible help.

Jaiswal and Reddy promised better supply of coal and natural gas to fuel power plants while Natarajan said there would be separate policy guidelines for the sector.

Singh told the delegation a 'practical, pragmatic and viable solution' would be found to their problems. He said there was a need to reduce risks to make power projects viable and it was a national challenge rather than a sectoral problem.

Private power producers under the banner of Association of Power Producers told Singh a failure to address their concerns would lead to a scenario of power shortages coexisting with stranded power assets of 42,000 Mw.

Jaiswal said coal supply to power plants would be raised to 70 per cent of the committed quantity under the fuel supply agreement.

Currently, state-owned miner Coal India insists on supplying only 50 per cent of the annual contracted quantity.

"We assured the companies coal supply can be raised to 70 per cent of the ACQ in case the power ministry agrees," he said.

No FSA has been signed by Coal India with companies since March 2009. Around 18,500-Mw capacity projects commissioned since then were likely to operate at 55 per cent of their capacity due to fuel constraints, the companies said.

"Without an FSA, power plants will not be feasible," Shinde said later in his briefing.

While the pace of overall capacity addition in the sector had shown an improvement during Plan period 2007-12, as reflected in the commissioning of 53,168 Mw till November 2011, electricity generation was constrained by domestic fuel shortages and price issues with imported coal, said APP Director General Ashok Khurana.